Economy

President Barack Obama startled handicappers by selecting Dartmouth President Jim Yong Kim as the U.S. candidate to lead the World Bank rather than the reported front-runner Larry Summers, Obama's former National Economic Council director. The Korean-born Kim is a medical doctor, anthropologist, and MacArthur fellow, best known for his pioneering work to fight HIV and tuberculosis in the Third World. Kim helped develop treatments for drug-resistant TB, and then successfully pushed to reduced the cost of anti-TB drugs. He is close associate of Dr. Paul Farmer, the lead founder of Partners in Health and subject of Tracy Kidder’s 2003 book, Mountains Beyond Mountains. While Third World leaders had pushed for an alternative to Summers, Kim was a total surprise. The appointment is a two-fer in the sense that it gives the job both to an American and to an Asian, as well as a welcome breakthrough in that the presidency goes to someone with on-the-ground work fighting poverty and disease as...

In a surprise move, President Barack Obama is nominating Dartmouth College President Jim Yong Kim to head the World Bank. The announcement will be made by Obama, Treasury Secretary Tim Geithner, and Secretary of State Hillary Clinton—who first recommended Kim for the post—in the Rose Garden later today. The actual decision will be made in April by the World Bank's 25-member board. Since the organization's founding in 1944, an American has always been president, perhaps influenced by the fact that the United States has the largest share of the vote on the board because of the size of its economy. Developing countries are expected to put forward at least three nominees. Kim will soon depart for a global tour to rally support for his nomination. Many expected Obama to nominate United Nations ambassador Susan Rice, Senator John Kerry, or former National Economic Council director Larry Summers instead of the Dartmouth president, who is the first Asian-American to be president of an Ivy...

A few times in recent elections, a debate moderator has said to the candidates, "There's been a lot of negativity in this race. Is there anything nice you can say about your opponent?" To which they usually reply, "He's got a lovely family." But the inability to admit that the other guy ever in his life did anything right just makes you look like a phony, or a jerk, or both. To wit : Hours after he secured the endorsement of former Florida Gov. Jeb Bush, Mitt Romney credited his brother, President George W. Bush, with keeping the country from a great depression in 2008. "I keep hearing the president say he's responsible for keeping the country out of a Great Depression," Romney said at a town hall in Arbutus, Maryland. "No, no, no, that was President George W. Bush and [then-Treasury Secretary] Hank Paulson." So let's get this straight: Bush saved America, and then America was fine, and then Barack Obama came in and ruined everything? How does that explain the fact that the economy...

Fears that the euro crisis will cross the Atlantic have started to ease after European leaders took precautions to stave off default in Greece and shore up other ailing economies. “In the past few months, financial stresses in Europe have lessened, which has contributed to an improved tone of financial markets around the world, including in the United States,” said Federal Reserve chair Ben Bernanke. Treasury Secretary Timothy Geithner agreed: “The European economies at the center of the crisis have made very significant progress.” That doesn't mean the global economy is all sunshine and daisies, though. The eurozone's economy contracted at the end of 2011, and weak growth there has resulted in depressed growth here too. Also, the situation in Spain is growing more precarious by the day, with one investor saying “it has replaced Italy as the lightning rod." Despite the ever-present risks, European Central Bank president Mario Draghi still says "The worst is over," but given the...

Say you’ve got a booming industry, one that already employs 2 million workers in the U.S. and is poised to add 1.3 million additional jobs by 2020. Imagine that the jobs cannot be off-shored, that the work helps decrease federal deficits, and millions of Americans depend on the industry just to get through their daily lives. Now ask yourself: Should it be legal to pay the workforce of this thriving and essential industry less than the minimum wage? Currently, it’s perfectly licit. A loophole in the Fair Labor Standards Act of 1938 exempts home-care workers—employees who provide personal care to the elderly and disabled in their homes—from basic work protections like the minimum wage and overtime pay. The rationale, according to the National Employment Law Project (NELP), was that people providing “companionship services” to seniors and people with disabilities were like casual babysitters. But this exemption, NELP points out, was never meant to include the extensive housework...

Had enough of Republican presidential candidates spinning vague ideas for America’s future? In the Florida state house, Republican legislators are being far more concrete with their plans. Rather than focusing on laws to support working families and small business growth, Florida Republicans are hell-bent on protecting big businesses and discouraging participation in our democracy. According to the Economic Policy Foundation, a business industry-funded think tank, companies steal upwards of $19 billion from their employees every year in unpaid overtime. Add to that employees who are not paid the legally mandated minimum wage or who go entirely unpaid for under-the-table jobs, and the economic loss is even greater. Whatever you think about raising the minimum wage or permitting the undocumented to work in the United States, we can all agree that those who work should be compensated as promised. Unfortunately, from individual families employing domestic workers to giant retail...

Big states that are expensive to have a campaign presence in are up next in the GOP primary, and they aren't going to be too friendly to the candidates' dwindling coffers. Seven primaries were held in February, and the contenders drained their funds in order to perform well in the high-stakes contests: Romney spent over $12 million while raising $11.5 million; Santorum raised $9 million, but spent $7.6 million; and Newt Gingrich spent $1.5 million while raising $2.6 million. Super PACs have become less of a supplement and more of a crutch as the GOP race plods on, keeping moribund campaigns alive. Foster Friess, who has helped keep Santorum afloat with regular cash infusions to the Red White and Blue Fund, said yesterday that the "role I needed to play is maybe accomplished." The super PAC ended the month with only $365,000 in the bank, compared with the $10.5 million still on hand for pro-Romney Restore Our Future, which has started to collect the Republican establishment donors who...

Mercifully, the misnamed JOBS Act did not sail through the Senate yesterday as expected. The Republican-sponsored “bipartisan” act is a Wall Street wish list of exemptions from investor protections that would allow some 80 percent of new stock offerings to avoid the usual disclosures. Except for its Orwellian, contrived acronym (Jumpstart Our Business Startups) JOBS has nothing to do with jobs. More likely, it stands for Just Obfuscate with B.S. The bill would even undo the Sarbanes-Oxley rules, enacted after the Enron scandal, prohibiting “stock analysts” from touting shares in order to help investment bankers get underwriting business. The Obama White House, always eager to curry favor with Wall Street donors and looking for something it could claim as bipartisanship, indicated it would sign the bill. Shame. With that signal, the measure sailed through the House with only 23 Democrats voting against. Shame again. Finally, the chair of the Securities and Exchange Commission, Mary...

If you want to know the priorities behind Paul Ryan’s latest budget, “The Path to Prosperity,” look no further than the line he delivered to the audience at the American Enterprise Institute. “We’ve become a nation of net takers versus makers,” said the House budget chair. The natural instinct of most liberals is to put this in stark class terms. In the language of Occupy, the makers are the “1 percent,” and the takers are the other 99 percent. But this ignores the degree to which the Republican Party is engaged in a form of generational warfare against the rising tide of younger Americans. For the last two years, Republicans have tried to defend the prerogatives of the elderly and near-elderly—opposing health care reform and anything else that would redistribute income to young people—for the sake of preserving their political coalition and providing benefits for the wealthy. The “makers” aren’t just rich people—it also includes the elderly people who feel entitled to the benefits...

From Representative Paul Ryan’s “ Path to Prosperity ”: The United States is facing a crushing burden of debt – a debt that will soon surpass the size of the entire U.S. economy and ultimately capsize it if left on its present course. From reality: This graph shows the amount the United States pays per year on interest for its debt. If this is what being “crushed by debt” looks like, then we’re doing pretty well. More seriously, this is another reason why it’s silly to focus obsessively over the total amount of debt. Yes, a large debt burden is a long-term liability, but at the moment—when global markets are eager to purchase US debt—there are more pressing issues to deal with, like high unemployment and a sluggish ecovery.

Representative Paul Ryan, chair of the House Budget Committee, plans to unveil his 2013 budget plan this morning, much to the excitement of Democrats and to the chagrin of Republicans, who remember how last year's budget negotiations turned out for them (not well). Although the details of the plan have yet to be released, changes to the tax code and Medicare will be the proposal's big-ticket items . Ryan's budget would make it so the tax code would have only two brackets—15 and 25 percent—eliminate the Alternative Minimum Tax, and cut almost all taxes on U.S. corporations' overseas earnings. Congressional Democrats are already gearing up to assail the budget plan. As Politico put it , "the release of the House GOP budget is like Christmas in March," and media blitzes and town halls are already in the works to frame the budget in a way that could leave them winners for the second year in a row. The Budget Committee plans to vote on the plan tomorrow, and House Democrats will unveil...

Later this morning, House Budget Chairman Paul Ryan will unveil his latest budget plan, “ The Path to Prosperity .” Like the “Roadmap” released last year—and passed by House Republicans—the Path to Prosperity fits neatly within Ryan’s self-described Randian ideology: It would slash social and entitlement spending and direct the savings to lower taxes on rich people and corporations. Despite this, as Matthew Yglesias points out, Ryan has a habit of portraying his policies as somehow beneficial to the broad majority of Americans. I plan to be in the audience for Ryan’s unveiling, but in the meantime, here are a few things to remember and look out for as Ryan tries to sell his program to the public. 1. Premium support will not lower costs for the health system or ordinary Americans : Ryan’s plan for Medicare vouchers came under fire last year and contributed to the unpopularity of House Republicans. This time around, Ryan has replaced vouchers with “premium support,” a plan in which...

Why does Larry Summers have more lives than a cat? He was fired as president of Harvard, did not exactly serve President Obama brilliantly as economic policy czar, and now seems to be in line for the presidency of the World Bank, a post traditionally chosen by the president of the United States. The deadline for the selection is this Friday, March 23. The appointment is supposed to be made official at the April meeting of the World Bank. Earlier this month, the White House leaked a short list of three names, Summers plus U.N. Ambassador Susan Rice and Massachusetts Senator John Kerry—neither of whom want the job. Brilliantly subtle signaling, that. Pointedly excluded from the list was Columbia University economist and world citizen Jeff Sachs, an adviser to the U.N. Secretary General Ban Ki-moon and a very serious crusader against world poverty. Sachs took the unprecedented and marvelously transparent step of nominating himself and publicly campaigning for the job, but he is a onetime...

President Obama in a Chevy Volt (official White House photo by Pete Souza)

For a long time, commentators noted that Barack Obama was going to have a hard time persuading the public with his argument about the economy, since it would come down to, "It could have been worse." Saying that unemployment may still be over 8 percent, and it peaked at 10 percent in October of 2009, but if it hadn't been for the stimulus we passed things would have been much, much worse, isn't going to be a consolation if you're unemployed. The fact that most economists say that the stimulus did in fact have a substantial positive effect on the economy doesn't really matter when it comes to getting people to vote for your re-election. When times are bad, "It could have been worse" is small comfort. That was the story up until recently. But the last few months have shown strong job growth, and most everyone is expecting that the economy will continue its upward trajectory. And guess what that has done to Mitt Romney: made him argue the mirror image of what everyone said Obama couldn't...

Apple—the world's most valuable company— announced today that it plans to use some of its $97 billion cash stockpile toward paying a regular dividend of $2.65 per share starting in the fourth quarter, and a stock buyback of up to $10 billion . Apple has resisted paying dividends—the last time Apple paid a dividend was in 1995 , before Steve Jobs returned as CEO—but analysts say that the plan is likely good for the company in the long-term. “It will attract a broader class of investor," says A. M. Sacconaghi Jr. with Bernstein Research. “This is something that large shareholders have been asking for," says Shaw Wu at Sterne Agee & Leach Inc. Over the course of three years, these programs should use up about $45 billion of the cash accumulated during past few years. The Latest Playing at No Cost, Right Into the Hands of Mobile Game Makers The New York Times Luxury Chinese Liquors Become Multibillion-Dollar Brands Bloomberg Businessweek News of the World The Economist Greek Deal...